Hoover mayor identifies $11.1 million in potential budget cuts due to COVID-19

Frank Brocato 4-16-18

Hoover Mayor Frank Brocato on Monday night told the Hoover City Council his administration so far has identified potential ways to reduce spending by more than $11 million this fiscal year.

The cuts are needed because city officials expect to lose between $8 million and $15 million in tax revenue due to business shutdowns related to the COVID-19 crisis, Brocato said.

Potential cuts identified so far include almost $7.7 million from capital projects and about $3.5 million from the operating budget, City Administrator Allan Rice said.

Some of the capital projects the mayor may recommend the City Council cut (and dollar amounts for this fiscal year) include:

Sidewalk on John Hawkins Parkway ($686,658)

New vehicle purchases ($500,000)

Land purchase next to Moss Rock Preserve boulder field ($500,000)

Sidewalk on Alford Avenue ($474,799)

West Hoover traffic study ($346,946)

Star Lake improvements ($339,904)

Sidewalks near Hoover Public Library ($197,213)

Fire Station No. 4 roof ($195,000)

Drainage improvements on Marywood Road ($185,000)

Bluff Park pavilion ($163,272)

Braddock Drive traffic signal upgrade ($158,550)

Traffic signal installation near Finley Center ($110,724)

Fire Station No. 2 roof ($100,000)

Interstate lighting ($99,960)

Valleydale Road traffic signal improvements ($59,983)

Traffic calming devices ($50,000)

Deo Dara Drive traffic signal upgrade ($40,320)

All those projects are good, viable projects for the city that both the mayor and City Council previously endorsed, but the city just might not be able to get them all done this fiscal year, Rice said

With the current financial crisis, it’s time to defund some of them, reprioritize, and maybe return to them when the city gets back to a normal economy and more typical city revenues, he said.

There also is $3 million of unallocated capital money that could be cut from the budget, $294,860 worth of capital projects that can funded through the city’s energy savings contract with Alabama Power, and $177,379 of funds left over from completed capital projects.

Councilman Curt Posey said he knows of some additional capital projects that likely can be cut from the budget to achieve additional savings.

Brocato said it will be up to the council to make the decision about which capital projects to cut, but he will work with them as a team to make recommendations.

In the general fund, his administration has identified about $3.5 million that he believes can be cut, but that’s just a starting point.

“This is a living, breathing document,” Brocato said. He wants to continue to have conversations with council members so they can work together to continue serving residents in a first-class way, he said.

Rice said the city administration already has begun cost control measures with the general fund.

They believe they can save:

$692,659 due to cancellation of the SEC Baseball Tournament, Celebrate Hoover Day and Mayor’s Prayer Breakfast

$629,310 by not filling numerous vacant city jobs

$501,000 by reducing overtime

$236,000 by eliminating travel

$1.4 million by cutting other costs from the operating budget

Rice said these are just starting points. The city administration expects to be able to save more money from unfilled positions, overtime reductions and other cuts in operations over the next six months.

Brocato said that, with the city’s revenue director projecting cuts in revenue between $8 million and $15 million, he wanted to shoot for a midpoint of about $11.5 million regarding budget cuts and adjust as necessary as time moves on and the city gets a clearer picture of the financial impact of the COVID-19 crisis.

City Council President Gene Smith said he thinks the city likely will need to cut close to $15 million, if not more.

Councilman Casey Middlebrooks agreed and said he would rather go ahead and identify closer to $15 million in cuts and add things back into the budget if revenues come in better than that.

Councilman Mike Shaw said he thinks they need to come up with a second-tier list of things that can be cut.

Brocato plans to give the council a financial update at each of its regular meetings.

CASH TO KEEP HOOVER MET COMPLEX AFLOAT

In other business Monday, the City Council agreed to transfer $250,000 from the city’s cash account to an account managed by Sports Facilities Management to help the Hoover Metropolitan Complex stay afloat.

Other than the RV Park, the facility has no revenue coming in right now because all the fields and facilities are shut down due to the COVID-19 outbreak, said Shaw, who is chairman of the advisory committee that oversees the complex.

SFM needs the additional revenue to maintain a minimal level of operations, Shaw said. SFM already has reduced its staffing levels from about 70 people to a core group of about a dozen full-time employees.

The city needs those employees to stay in place to keep the facilities maintained and continue booking future events so the complex can ramp back up quickly when it is safe to reopen.

“We don’t want the cupboard to be bare in three months,” he said.

The $250,000 should help SFM make payroll through June 1, Shaw said.

Also, it’s not like the city is supporting a private company because SFM simply is acting as a managing agent for city facilities, Rice said. SFM cannot use the money anywhere but at the Hoover Metropolitan Complex, he said.